Build Profits with a Private-Pay Practice

By Mary E. Boname, OD, MS, FAAO

March 2, 2016


A private-pay practice can offer a steadier stream of income, and can allow you to provide a more personalized experience to patients.


GAUGE REIMBURSEMENT. Health care reform may be adversely impacting your level of reimbursement, making many insurance plans no longer worthwhile to accept.

PRIORITIZE PRACTICE GOALS. Determine if the kind of care you want to provide is compatible with the needs of a managed care-dominated practice.

CREATIVELY MARKET. Create unusual marketing pieces and events to show patients why it’s worth paying out of pocket to visit them. Show what makes your practice unique.

A practice that isn’t reliant on managed care reimbursement for profitability can give you greater flexibility in practice. I accept Horizon Blue Cross Blue Shield (BCBS) and Medicare, but the majority of my patients pay for my services out of pocket. About 40 percent of my patients have BCBS and Medicare, and the remaining 60 percent are fee-for-service patients.

According to the Management & Business Academy Key Metrics, Independent optometric practices receive 52 percent of revenue payments from health and vision insurance plans, 15 percent from Medicare and 33 percent directly from patients. The sources of payments vary widely across practices. MBA OD participants reported that a median of 65 percent of the exams they performed in 2010 had a managed care discount.

Consider Your Reimbursement Levels

I opened Montgomery Eye Care “cold” in December 1997. After approximately three years in practice, I began dropping insurance plans that I felt did not reimburse me well for my professional services, and by 2004, I had eliminated all insurances except Medicare and Horizon BCBS.

The front and back of the birthday postcard Dr. Boname sends to patients. Dr. Boname says that when you have a primarily private-pay practice it helps to think creatively about how to emphasize the one-of-a-kind experience patients will find in your office. Help them understand what they get in return for paying out of pocket.

Gauge Impact of Health Care Reform

Health care reform has negatively impacted my practice with an influx of patients who believe that their eyecare should be free. Although I only accept two insurances, I have noticed that with some of the recent changes, reimbursements have become even lower, and in some cases, are between one-third and one-half of my usual and customary fee.

It is very difficult to sustain a viable private practice in that environment. However, I believe that due to the way I have structured my practice–as primarily private pay–I am probably less affected than many of my colleagues.

Prioritize Practice Goals

I decided that the most important thing to do was to create an exceptional patient care experience, and to hone my skills at building a relationship with my patients based on genuine caring, trust and my commitment to partnering with them to take the best possible care of their vision, the health of their eyes and their general health. Naturally, this led to many patient referrals, which is the foundation on which my practice and my professional reputation has been built.

Part of why I love what I do is because I am able to control the environment in which I practice: I want a spa-like, personalized experience for my patients at each visit, and I like to make sure that, in addition to a thorough ocular and medical history, I am obtaining a detailed social history, and assisting patients with referrals for caregiver support groups, home healthcare agencies for their aging parents, psychotherapy to support their mental and emotional health, discussions about meditation and essential oils to alleviate stress, isotonic nutritional supplementation, and genetic testing to tailor their ocular and systemic care for maximal benefit.

Educate Patients on Why Your Services Are Worth It

The challenge is attracting new patients and educating them about my practice philosophy and why my patients believe that the level of care I provide is worth paying my fee, and accepting a reduced out-of-network benefit, or utilizing other pre-tax medical spending accounts to cover the cost of my fee.

I am grateful for each patient’s decision to choose me, and it is my responsibility and privilege to care for them in such a way that they would not consider going elsewhere, and want all their family and friends to come to me, too. The last reason I would ever want someone to choose me as their optometric physician is because I am “on the list” of participating providers.

Many patients are surprised to learn that insurance companies do not pay the doctor the difference between their co-pay and his/her usual and customary fee. Maybe not all patients are surprised that insurance companies don’t pay you 100 percent of your fee, but not every patient reviews the Explanation of Benefits (one person in the household usually does). I think patients understand the concept of fixed expenses to keep a practice open and the need for a doctor to see a certain number of patients/day at $x/patient to keep the practice operating in the black.

They certainly understand that there are costs to maintaining a physical location, and that the doctor needs to see a certain number of patients per day to meet their overhead expenses. If I participated with a large number of insurances that pay me less than 50 percent of my fee, I would have to see more than twice the number of patients per day just to stay afloat. A stressed-out doctor who has a brief amount of time to examine a patient tends to like what they do less and less, and the quality of patient care will be less than it would be if the doctor had more control over their schedule.

Probably 1-2 out of 10 patients will walk when they hear that we don’t accept their vision insurance. The remaining 8-9 of 10 patients decide to schedule an appointment. A patient I recently examined, with out-of-network coverage, even posted a positive review about his experience: “I just had my first eye examination at Montgomery Eye Care and I couldn’t be happier with the visit. Dr. Boname was very thorough and took the time to explain everything in depth. I immediately felt comfortable. The staff was very friendly. I look forward to my next appointment.”

Purchase Inventory Tailored to Private-Pay Patients

We like to have an array of ophthalmic frames to appeal to those who wish to invest in luxury eyewear, or those who are in the market for a good quality, but more reasonably priced, option. Our optician, Ben, educates patients about lens materials, treatments and other products, based on their visual demands in the workplace and at home. An area of particular interest for both of us are BluTech lenses to filter out blue radiation, especially for those spending four hours, or more, per day on the computer.

I prefer to fit my patients with daily disposable contact lenses, and I spend a great deal of time educating them on the relationship between ocular surface disease, Meibomian gland dysfunction, and ill-fitting contact lenses that do not provide them with sharp visual acuity. All of my contact lens wearers are prescribed products (Rx or OTC) to clean the lid margin, and good hygiene is stressed.

Have the Conversation with Patients

My staff is trained to say: “We participate directly with Medicare and Horizon BCBS. If you have another insurance carrier, we are happy to provide a fee slip with the proper procedural and diagnostic codes, which can be submitted for out-of-network reimbursement.”

If the patient seems surprised or upset, we explain: “Among patients who opted to go elsewhere because of our lack of participation with an insurance plan, the majority of them return to the practice, and express that they value the quality of the care and the service, and they are willing to pay for it, even if they are submitting for a reduced out-of-network benefit to be a patient here at Montgomery Eye Care.”–Mary Boname, OD, MS, FAAO

Invest in Instrumentation that Works for Private-Pay Practice

With my smaller pool of private-pay patients, I have to weigh the cost/benefit of investing in any instrument. Even if I were to participate in a battery of insurances, it would be difficult as a single-doctor practiceto generate enough reimbursement to cover the monthly lease payment on, for example, a $60,000 interest. I had a candid conversation with an ophthalmologist near my office who said that even in his case ( a multi-doctor practice with four MDs and four ODs) the cost of purchasing and/or repairing equipment is astronomical and difficult to manage.

Use Creative Marketing Materials

With most patients paying out-of-pocket for products and services, it helps to have a creative message that emphasizes the one-of-a-kind experience patients will find in your office. One of the best things I did this past year was a “Birthday Postcard” featuring my Dad holding my brother (the firstborn) in August 1956. It looks like a color snapshot, and there is copy that wishes the recipient a Happy Birthday and extends a $50 discount on a complete pair of Rx glasses.

The patient has up to six months from the date of their birthday to use it. It has been a huge hit, despite what we hear about needing to communicate solely with texts and e-mails. It is an old-fashioned touch that my patients find charming. We always offer a special discount for multiple-pair sales.

Emphasize Wellness & Preventative Medicine

Another way to emphasize greater value to private-pay patients is by focusing on wellness and preventative care. Generally, every quarter we will have an “event” at the office. We like to hold these on Saturdays, and they are often centered around wellness and preventive care. During the holidays, we had a “Holiday Stress Relief” event with refreshments, chair massages and essential oils.This spring, I will be having a nutrition/genetic testing/wellness event with samples of product and information on how to take control of your overall and ocular health.

Mary E. Boname, OD, MS, FAAO, ownsMontgomery Eyecare in Skillman, N.J.To contact her:

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